CHARLETY Patricia

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Our model develops a theory of how the existence of systematic voters who always vote, besides partisans who vote strategically, affects the outcome of general meetings. Depending on the shareholder structure, we show that systematic voting has two opposite consequences on the outcomes of the meeting. It reinforces the power of the largest group of systematic voters. Less expectedly, it also creates an incentive for partisans to vote and oppose together this same group. We apply our results to different ownership structures. In particular, we emphasize the importance, for the board, of having the support of the largest partisan, the role of proxy advisors, and examine the conditions under which blockholders can successfully oppose the largest group of systematic voters alone or together (wolf pack).

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We analyze how a minimum quorum affects shareholder voting in meetings. We show that a quorum creates an incentive for coalition formation of shareholders supporting the resolution. It works as a coordination device for possibly small shareholders allied in a winning voting coalition. It also generates an equilibrium in which the resolution is not adopted due to lack of quorum. The shareholder structure is central to the determination of the outcome of the vote. A resolution supported by the dominant shareholder is always adopted if his ownership reaches the quorum. However, allied blockholders can successfully approve a resolution opposed by the dominant owner. As a consequence, it is more effective for an active shareholder to propose and pass a resolution than to oppose a board resolution. Finally, we find that the dominant shareholder de facto controls the meeting when his share by far exceeds the second largest share.

According to the stakeholder theory, Corporate Social Responsibility (CSR) is the answer given by companies to the increasing pressure from employees, shareholders, local communities, environmental NGOs or regulators to take into account the environmental and social impacts of their activities. The challenge is not simply to compensate for negative externalities but to transform companies to allow for sustainable growth. Thus, CSR pushes companies to be proactive and to exceed regulatory expectations. However, how to reconcile such different and even opposing objectives? As more and more companies integrate CSR into their strategies, governance processes seem to be the missing link in bringing together economic, social and environmental performance. This thesis presents empirical and theoretical arguments for the impact of governance at its highest level, from the board of directors to the CEO. After an introductory chapter, Chapter 2 analyzes the link between board composition and the integration of CSR into corporate strategy. It is based on a law on the representation of women on boards of directors. Adopted in France in 2011, this law has led to the appointment of new directors, most of whom are younger than their predecessors. However, this chapter shows that the increase in diversity on boards is not correlated with changes in financial and non-financial performance. This chapter is based on a study of SBF 120 companies from 2009 to 2015. However, while the characteristics of the directors are involved in the decision-making process, the implementation of strategies and the management of the company is entrusted to the CEO. Through a remuneration system with a variable component, the board of directors strives to align the interests of the CEO with its own. Chapter 3 examines the effectiveness of variable remuneration based on environmental or societal criteria. It shows that the impact of these "CSR bonuses" depends on the company's governance model. For companies with a shareholder governance model, CSR bonuses seem to have only a negative impact on financial performance. On the other hand, for companies of the partnership type, these bonuses effectively improve extra-financial performance without reducing financial performance. This empirical study is based on a global panel of 3500 companies over the period 2006-2015. Chapter 4 proposes a theoretical model to analyze the impact of the intrinsic or extrinsic nature of incentives. Based on the principal-agent model developed by Che and Yoo (2001), this chapter analyzes different incentives for a company composed of two agents working on a CSR task. Three scenarios are studied: both agents receive financial compensation, both agents are intrinsically motivated, one agent is intrinsically motivated and the other financially motivated. The model shows that the optimal scenario for the principal depends on the level of intrinsic motivation but also on the interdependence between the two agents' decisions. In the particular case of the remuneration of company directors, the empirical evidence shows that including CSR criteria in the remuneration is more adapted to companies with a high decisional interdependence. The conclusion traces the link between governance and CSR at several levels, and discusses the implication of networks and mimicry effects between firms.

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The central theme of my doctoral dissertation is Regulation in multiple forms. Specifically, I focus on the parameters affected by mandatory, optional or self-developed regulation. The three chapters of the current paper use the banking industry in European Union (EU) countries as a parameter. Over the past decade, the banking industry has undergone several regulatory transformations that have affected the quantity and quality of information disclosed. In addition, the recent financial crisis had banks in the spotlight, given their central role in the market downturn.In the first chapter, "Does Basel II Affect the Market Assessment of Discretionary Loan Loss Provisions?", I examine the impact of the 2008 Basel Capital Accord implemented in the European Union. Basel II was intended to bring an increased level of transparency to the operations of banks. As a result, Basel II introduces an incentive for banks to (1) increase their forward-looking provisioning and (2) reduce their opportunistic provisioning.In our institution, Basel II introduces incentives for managers to recognize less discretionary income-growing loan loss provisions (DLLPs). The increasing income-DLLPs are important since they are recognized in the literature as mostly opportunistic. These findings are of particular importance in light of recent and upcoming regulatory developments in the banking industry. I am referring to the introduction of IFRS 9 in 2018 and Basel III in 2019. Our results highlight the need for accounting and banking regulators to coordinate their efforts with disregard to their innate way of different objectives.For my second chapter, "Has Basel II induced conservatism reduced the level of revenue management of EU banks?" Basel II reduces the discretionary power of provisions that is used in the pre-adoption period of opportunistic reporting (to recognize the increasing revenues to achieve earnings management DLLPs objectives).The third chapter, "The impact of the EU Bank 2010 Stress Test Disclosure results on banks" earnings management analyzes the impact that the disclosure of the Prospective 2010 Macroeconomic Stress Test (ST) has on the level of participating banks opportunistic reporting. Specifically, it tests whether the disclosure decreases and therefore the opacity of the bank earnings (approximated by management and regularization of the benchmark income to beat it) tested banks relative to non-banks tested.We find that banks that enter the era of reducing the level of their benchmark hits. In corroboration with previous results, we document that disclosure of ST likely reduces the results of banks' opacity and managers reduce opportunistic reporting due to increased public scrutiny. This paper is the first to analyze the impact that ST disclosure results has on the earnings level of banks' management practices and adds to the emerging ST literature.Overall, my thesis sheds light on current and relevant issues that concern one of the most scrutinized and criticized industries in the world. By analyzing the effect of different sets of regulations on financial reporting and accounting numbers, this thesis makes numerous contributions to the academic literature and sheds light on the practical effects of overlapping regulations in the EU.

This paper provides the first systematic analysis of the evolution of female and male appointments to central bank boards. We build a novel and unique dataset that tracks appointments and replacements in a balanced panel of 26 OECD central bank boards from 2003 to 2015. We find that the likelihood of appointing a female is higher when a female rather than a male is being replaced and lower when the percentage of women on the board is already high.

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On the occasion of the 1st International Forum of the Council on Business and Society that groups six of the world's leading business schools -ESSEC, Keio, Fudan, Tuck, Mannheim and FGV-EAESP - a White Paper was drafted by Professor Patricia Charléty of ESSEC Business School. The Paper deals with the question of Corporate Governance and Leadership and in particular analyses, draws conclusions and offers recommendations on Governance in relation to society, finance, corporate Boards and the CEO.

Does the fund sponsor have an incentive to improve the quality of its funds, given that it is costly with uncertain results and that its goal is to sell the maximum number of fund units? The answer to this question was addressed in three parts. 1) We explain how the literature has come to justify the study of incentives in portfolio management and we review the main results. 2) By proposing a definition of fund quality, we frame the conditions that constitute quality incentives for the fund sponsor in a vertically differentiated duopoly. 3) We study the system of fees and incentives for fund sellers in the United States, to test for the existence of conflicts of interest between investors and sellers. We finally open this work to the question of alternative strategies to fund promoters' performance in order to sell more.